Profits leap 57% for northern house builder Persimmon

Persimmon has reported a surge in pre-tax profits for the six months to the end of June.

Persimmon has reported a surge in pre-tax profits for the six months to the end of June.

First published in Business News
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HOUSE builder Persimmon has reported a 57 per cent rise in earnings after taking advantage of the buoyant property market.

The York-based group said underlying pre-tax profits rose to £212.9m for the six months to the end of June.

Revenues were up 33 per cent to £1.2bn while legal completions increased 28 per cent to 6,408 new homes sold, with the average selling price up 4.3 per cent to £186,970.

Chief executive Jeff Fairburn said: "Persimmon has produced another strong performance in the first half of 2014, taking advantage of the current market opportunities to deliver growth whilst strengthening the financial position of the business."

The results come a day after rival Bovis Homes reported a 166 per cent rise in half-year profits but there were mixed signals from other parts of the market.

Nationwide said quarterly gross mortgage lending had fallen amid signs of cooling while data from property website Rightmove showed a steep fall in asking prices.

Persimmon said today it had now entered the traditionally slower summer trading weeks but that private sale reservation rates were ahead of last year and forward sales from July 1 were running at £1.53bn, 22 per cent ahead of the same period in 2013.

The results cover a period when new rules for lenders on checking whether borrowers can afford their loan - the Mortgage Market Review - have been introduced. Nationwide said these had had some effect as its lending fell.

But Persimmon chairman Nicholas Wrigley said: "We anticipate that mortgage lenders will continue to actively develop their participation in the UK mortgage market over the medium term.

"We welcome the continued discipline of mortgage lenders against the backdrop of the ongoing improvement in the UK's wider economic performance which is supporting increased confidence in our regional markets.

"Disciplined lending in support of a keen appetite to purchase newly built homes from both first time buyers and existing home owners provides the opportunity for the housebuilding industry to increase construction activity.

"The results for the first half of 2014 represent an excellent further step forward in achieving our strategic objectives.

"Whilst we remain vigilant about the continued challenges facing our markets emanating from events both at home and abroad I remain confident of Persimmon's continued successful development."

Shore Capital analyst Robin Hardy said the profits were "a fraction higher" than expected and maintained a buy stance on the stock.

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